The amount of the depreciation expense for the second full year of use of a fixed asset costing $100,000, with an estimated residual value of $5,000 and a useful life of four years, is $25,000 by the double-declining-balance method.

Question

Quizplus · Accepted Answer

The double-declining-balance method depreciates an asset by a fixed percentage each year. In this case, the fixed percentage is 50%, which is double the straight-line rate of 25% (100% divided by the useful life of 4 years).

Year 1: Depreciation expense = ($100,000 - $5,000) x 50% = $47,500
Year 2: Depreciation expense = ($100,000 - $5,000 - $47,500) x 50% = $25,125

Therefore, the depreciation expense for the second full year of use is $25,125, which is approximately equal to $25,000.

The Amount of the Depreciation Expense for the Second Full